Ideas, Think-Tanks, and Governments

IDEAS, THINK-TANKS AND GOVERNMENTS Away from the Power Elite, Back
to the People by Edwin J. Feulner, Jr.

I am going to talk about ideas, think-tanks and governments, but I
think you will see that what I am really talking about is
change--inno'vation. Not sudden changes, but gradual changes in
intellectual discussions, in public polic y deba7tes, in power
structures, in governments, and ultimately in the way we are
governed. of course, all of this change ultimately depends on
ideas, and on the power of ideas.

We often hear about how policy is influenced by the "vested
interests," but ideas are more powerful in the long run. John
Maynard Keynes (not an economist I quote frequently) once said,

I am sure that the power of vested interests is vastly exaggerated
compared with the gradual encroachment of ideas.... It is ideas,
not vested int erests, which are dangerous for good or evil ....
Mad men in authority who hear voices in the air are distilling
their frenzy from same academic scribbler from a few years back.

But where do these ideas come from, and how do they influence the
policymakers?

Ideas like Supply Side economics, privatization, entarprise zones,
and the flat tax are produced by individuals first--the academic
scribblers, as Keynes would call them. Milton Friedman and Stuart
Butler in the United States and Madsen Pirie in the Un ited
Kingdom, for example, explain, and expand the ideas. But, it takes
an institution to help popularize and propagandize an idea--to
market an idea. Organizations like the institute for Economic
Affairs or the Adam Smith Institute in London, my own Heri t age
Foundatibn in the .United States and the Centre for Policy Studies
and the Centre for Independent studies here in Australia host
conferences, lectures and seminars and publish policy reports,
books and monographs to popularize an idea. Through "outrea ch"
programs an institution can

Edwin J. Feulner, Jr. is President of The Hcritagc Foundotion,
Washington, D.C.

This is the text of the 18th Latham Mcmorial Lecture dclivcrcd
August 18, 1985 in Sydney, Australia. It is reprinted with the kind
permission of the Australian journal, duidritnt.

promote an idea on a continuing basis and cause change. But this
takes time.

Procter and Gamble does not sell Crest toothpaste by taking out one
newspaper ad or running one television commercial. They sell it and
res ell it every day by keeping the product fresh in the consumer's
mind. The institutes that I mentioned sell ideas in much the same
manner.

Let me give you an example of how Heritage was active in the
selling of the idea of "Supply Side Economics." About six years ago
editorial writers at the Wall Street Journal started introducing
some new ideas in economic thinking which became fashionably k nown
as "Supply Side Economics." While working at the Wall Street
Journal, talking to people like Congressman Jack Kemp and Senator
Bill Roth and working with other outside economists like Dr. Norman
Ture, people like Bob Bartley, Paul Craig Roberts and J ude
Wanniski began the Supply Side economic revolution. At Heritage we
were active in bringing ideas concerning Supply Side Economics to
the attention of opinion leaders in Washington.

Together with the Institute for Research'on the Economic s of
Taxation (the only Supply Side econbmic "think-tank" in Washington)
we produced a book titled, Essays in Supply Side Economics which
laid out the theoretical case for Supply Side Economics. We
co-hosted a conference to introduce the publication and discuss the
ide as that were put forth in the book. The conference was'attended
by 400 congressional aides, Members of Congress, Administration
officials, professors and representatives from the media. '

Through the book and the conference we provided evidence that
reduci ng government barriers to productivity and growth and
restoring incentives leads inevitably to a stronger, healthier
ecoiiomy. As .Supply Siders and Monetarists have shown, individuals
are fully cognizant of the real effects of government action and
adjus t their economic action accordingly. Therefore, by lowering
the tax burden and restoring incentives we alter the choice between
saving and consuming and between work and leisure.

Through the discussion of the relationship between government
policy, incenti ves, and economic performance we attempted to
clarify how government actions interact with the economy. And, we
made significant inroads in the myth that Supply Side theory was
dreamed up while economist Arthur Laffer was doodling on a cocktail
napkin.

Af ter the conference we followed up with copies of the books. The
press was sent an appropriate press release and summary: 'lop-Ed"
columns were crafted from some of the chapters and were printed by
newspapers all around the country. All in all, we emphasiz ed not
only the production of a scholarly work, but also the marketing of
the finished product to our target audiences.

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But it takes time for an institution to reach this stage of
development, to become credible and for their ideas to filter into
and redirect the policy debates. And most importantly, it takes
time for a new school of thought to cause change.

Like the Fabian Movement in Britain, America's conservative
movement took some thirty years to move into its dominant position
in the public polic y mainstream. But, unlike the organized and
concerted Fabian Movement, our conservative movement began as the
work of isolated, individual scholars. Even today, modern
"conservatism" displays various disagreements in areas of public
policy such as the rol e of labor unions, a proper foreign policy
for the United States, the importance of social issues and the best
monetary policy for the nation. But, overriding these differences
is-the commitment to a free society. Conservatives are committed to
greater.fre edom of choice for the individual-and an ex of the
range of choices available. .pansion

Permit me a brief digression to define the term conservative. As I
use it, the term "conservative" has actually become more of a
shorthand label for a broad philosophic al movement in the United
States. This movement has come to include: traditional
conservatives, New Right conservatives, neoconservatives and
libertarians.

Traditional conservatism stresses the primacy of individual
freedom, the economic merits of free en terprise, the importance of
limited government and the need for a strong national defense. In
philosophical terms, traditional conservatism rests on a respect
for tradition and custom, affirmation of religious principle, the
rule of law, and belief in con stitutional processes.

Neoconservatives are generally individuals formerly associated with
the political Left, who became disenchanted with the breakdown of
order and other social malfunctions under liberal auspices.
Neoconservatives tend to stress the imp ortance of tradition,
institutional stability and the rule of law. They are staunchly
anti-Communist, but their view of free enterprise ranges from
mildly supportive to-overtly hostile. Irving Kristol's definition
of neoconsek-V-aCtiVes is: "Liberals who have been mugged by
reality."

New Right conservatism identifies itself as a "morally-based
conservatism" and concerns itself mainly, but not entirely, with
social issues--options in education (vouchers and tuition tax
credits), voluntary school prayer, bus ing, pornography, abortion,
and job quotas. Libertarians tend to emphasize freedom over order.
Their debates tend to focus on economic questions. The free market
and the individual reign supreme in a minimalist state.
Pornography, drugs, and even defense are issues left.to the
individual. And then, of course, there is one of my favorite recent
additions to the conservative lexicon, the "neo-Neanderthal.11 This
name has a fresh ring to it--and suggests that one was right from
the start.

I n the U.S. it took 30 years for these "conservative" ideas to
move iiito the mainstream. The conservative movement in America
began as an intecllectual movem, ent about 1950 with the
publication of works such a.s.Richard Weaver's Ideas Have
Conseauences, R ussell Kirk's The Conservative Mind, and William F.
Buckley's God and Man at Yale. In the early 1950s there was only
one free-market oriented journal of any influence (The Freeman).
Since that time a dozen or more conservative journals have joined
the pub lic policy debates ... with Heritage's own Policy Review
jumping in, in 1977.

Over the past thirty years, we have seen a gradual change in the
perception of conservatives and conservative ideas across America.
Conservatives were once seen as wedded to "sta le old ideas" from
the past. We were "opposed to change" our critics charged. We were
considered "irrelevant" by the "opinion-makers'l.in the media and
the powerbrokers in the Senate and the House of Representatives.
Now, many of those same Senators and C ongressmen have entered
involuntary retirement. And, many of the ideas discussed on the
pages of those conservative journals have become policy in the
Reagan Administration and for the Democratic Party Opposition.

We saw that the strength of President Reag an's 1980 and 1984
election victories surprised many members of the U.S. media, the
Washington power elite and many foreign observers. In 1980 these
observers claimed that the Reagan victory was merely a repudiation
of the Carter Administration's ineptitu de; they claimed it was a
victory of a -personality. But,-this overlooks the conservative
Republican victocy of the Senate and the'power of ideas.

.lonald Reagan appealed to traditional values and individual
freedom and responsibility, and according to the polls there was an
increase in the number of individuals identifying themselves as
Repub'Acans and conservatives. The 1980 Republican platform
endorsed enterprise zones, free trade, tax cuts, economic growth,
income tax indexation and the Republicans won the votes.

1980 soon became known as the campaign of ideas; President
Reagan. spoke of winning a battle of ideas, and the Republican
Party became the party of ideas. By the summer of 1984, even Walter
Mondale's Issues Director for the 1984 Presidential ca mpaign was
quoted in the New York Times Sunday Magazine (July 15, 1984) as
saying: "Ronald Reagan won [in 1980] ... on the strength of ideas
.... He had a vision of the future, and the Democrats
didn't....

New York's Democrat Senator Daniel Patrick Moynih an was even
more blunt in his assessment. He said, "The Republicans simply left
us behind. They became the party of ideas and we were left, in Lord
Macaulay's phrase, 'the stupid party.'" "There were ideas over
there," said Moynihan, "so who ends up runni ng the country?

4

Politicians who know how to use ideas, that's who. The end
product of government is laws--and laws emerge from ideas.11

It is*important to keep in mind that the President and the
majority of the Senators and Congressmen are elected not because
they are Republicans or Democrats, but because they share a vision
with the majority of the voters of what the government should be
doing for them; how they are best represented; and what the
national government's policies should be.

Even though Ronald Reagan won the "battle of ideas" at the
ballot box, and he may have a clear vision of what he would like to
achieve while in office, he cannot carry out his reform plans
without support in the Congress, which in turn is based upon
support in the pu blic at large. And this is why the "battle of
ideas"-often referred to in a campaign is waged on two political
fronts: electoral politics and policy politics. The latter is my
specialty and is, in my opinion, the more important of the two.

Policy politics is con6erned with what happens between the
election, the gradual changes. Policy politics is watching your
elected officials rerform in committee and on the floor of Congress
or Parliament. It is holding them accountable and trying to
influence thex.

Heri tage and other think-tanks are the practitioners of policy
politics. We help to translate the works of academics into
background papers, issues brie.fs,.monographs, journal articles,
congressional testimony and confcrence topics. We bring ideas into
the p ublic policy arena to try and influence public policy. The
name of our business is influercing policy--causing.change.

Our Left-liberal counterpart, the Brookings Institution, a
famous private think-tank in Washington, produces books
and.journals and perfo rms an invaluable personnel function for the
liberals: it acts as a revolving door for individuals to come and
go from administrative agency to think-tank to agency, to media,
back for a sabbatical at Brookings-and finally into a high-level
policy-making p osition in a sympathetic administration. It allows
the key thought leaders of the Left-liberal establishment to keep
their team together in months or years of exile. When the White
House calls, as it often did in the Carter Administration, they are
ready to step into jobs they have been preparing for while in the
wilderness.

The American Enterprise Institute performs as similar function
for Republican Administrations. Those associated with AEI who have
served in the Reagan Administration include: Ambassador Jeane
Kirkpatrick, the new Office of Management and Budget Director J
ames Miller, and Ambassador and former Federal Reserve Chairman
Arthur Burns. After leaving the White House President Ford joined
AEI as a

Distinguished Fellow, and even y-iur former Prime minister, Malcolm
Fraser, is associated with AEI. Heritage is not as active 1.n this
r'ble. Instead, we initiated and we specialize in the area of
quick-response public policy research and in marketing the academic
works for public policy consumption. We try to bring together the
different views of conservatism that I m entioned by providing the
"flame for the moths to gather around," as one of your own Liberal
Right think-tanks was recently described. Ten years ago Heritage
itself was little more than an idea. I had been Chief of Staff for
a Republican Congressman and w i tnessed numerous cases where vital
studies concerning pending legislation arrived on our desks the day
after a key vote. One particular case came up in 1971 involving the
SST--the supersonic transport. This was an issue which divided the
conservative Repu b licans in Congress. On the one hand it could be
argued that the government should get involved in the development
of the SST because the technological spin-offs would benefit the
military. And on the other hand, it could be argued that if there
was indeed a market for such a plane, the. private sector would
produce it to meet the needs of.the market.

Debate was heated, votes were cast, and on the day following the
vote an excellent study arrivecl on my desk which thoroughly laid
out these arguments. It def ined the debate, but it was one day
late. I immediately called up the President of this organization to
praise him for this thorough piece of research and ask why we did
not receive it until after the debate and the vote. His answer:
they did not want to influence the vote. That was when the idea for
The Heritage Foundation was b(irn.

Early on we decided that if our think-tank were to have any
influence in the "battle of ideas"--if we wanted to cause changes
in polic'y--we must settle on a few operating pr inciples. First
and foremost, the product must be available in a timely fashion. It
does no good to publish an incisive report the day after the debate
and vote or the day after the decision has been-made in the
Administration. ror example, thirty-six hou rs after the
Administration's FY86 budget was released, Heritage released a
fifty-page analysis which we were told the White House and the
Office of Management and Budget found more useful than OMB's own
Guide.

The second principle that we agreed on when H eritage was
established is what I call the "briefcase test." The study should
be as brief as possible. Arguments should be concise and clearly
presented. Because of the vast number of issues'addressed in
Congress, there is a desperate need for concise stu d ies which cut
through the rhetoric and lay out the arguments to help members of
Congress make informed choices on the issues before them. For this
reason, we try to limit our Backgrounders to ten pages--a document
which stands a much greater chance of bei ng put into a briefcase
and

6

read before the debate than a book-which generally ends up on a
bookshelf. We have 'even come up with an "ur-jent" format--the
Executive Memorandum. This series outlinew an argument in its
briefest form--one sheet front and back--and is written, printed
and hand-delivered to the concerned Washington offices in 24 hours,
often all the time available before a crucial decision is made.

The third principle is that the product must reach the right
people. We spend quite a bit of time updating and refining our
lists of Congressional and Administration aides. We try to ensure
that the assistant handling welfare reform does not receive a paper
on military reform. Not only does this save our resources, but it
ensures that Congression al and Administration aides know that the
Heritage item is something which can help them to perform their
job.

The final operating principle is that, of course, the product must
be credible. Because we are a tax-exempt educational research
institute, not a lobbying group, we are free to express our views
as outspokenly as we want. Some of the ideas we have targeted
recently and have had an impact include: privatization, UNESCO, and
the Strategic Defense initiative.

Privatization moves the private sector in to the process of
providing services in order to eliminate or reduce government
monopolies. Englishman Madsen Pirie of the Adam Smith-Institute
recently toured Australia speaking about privatization. or. Pirie
spoke of the British experience of privatizin g 22 government-owned
entities, including: British Telecom, Jaguar, English Channel
Hovercraft, British Aerospace and the National Bus Company.

Privatization has also worked in public housing. The British have
sold council houses to their tenants at a 20 t o 50 percent
discount off the market-value of the home. Not only does getting
these houses off the government rolls reduce the cost to the
government and therefore the taxpayers, but along with the selling
of public housing we have witnessed an interestin g sociological
change take place. When the new owners get an equity stake in
maintaining the property, housing projects become neighborhoods and
neighborhoods become communities'. People take an interest in their
home--gardens are planted, neighbors become more vigilant, and
vandalism and crime decrease.

We at Heritage are working closely with the U.S. Department of
Housing and Urban Development and with the Congress to launch
privatization pilot projects and legislation to promote
privatization, and last S eptember, Congressman Jack Kemp of New
York introduced the Urban Homesteading Act.

In education, our analysts have been strong supporters of tuition
tax credits on the theory that: choice and diversity is what we
need in

7

education rather than monopoly. Earlier this month, the U.S.
Secretary of Education announced his intention to introduc;e
legislation supporting education vouchers for the educationally
disadvantaged.

in Social Security, we have advocated expanding Indivi dual
Retirement Accounts whenever possible. These tax-deductible
contributions to savings accounts gradually make government Social
Security a smaller and smaller component of.people's retirement
income. Also, we have advocated a number of measures. which would
move toward privatizing the entire Social Security system, but the
.political climate in Washington has delAyed any serious discussion
of these measures.

Beyond Social Security, housing and education we are exploring ways
to privatize mass transit, air traffic control, AMTRAK, the postal
service and other areas where.the government sector has been the
monopoly provider of these services. Privatization provides for
greater choice of services in these areas at a reduced cost. And,
with budget battles r aging in Congress, privatization is one
of-the very few methods of cutting the budget which actually could
develop a positive constituency. The fact is, we are now working
from our agenda instead of the traditional Left-libsral agenda. We
have been able t o change the focus of debate on these major public
policy issues involving billions of dollars and practices of the
last 25 years.

The second area where we have had an impact that I would like to
mention is the United Nations. Senator Moynihan, whom I ment ioned
earlier, also served as U.S. Permanent Representative to the U.N.
from 1975-76 and later wrote a book detailing his experience at the
U.N. which he titled, A Dangerous Place. In 1982 we began to see
what Senator Moynihan meant.

With a budget of $4 b illion--one-quarter of which t'.11e U.S.
pays--50,000 employees, 159 nations represented--many with
populations not much larger than this gathering--we asked what do
we have to slTow for it? Resolutions denouncing Israel, Capitalism,
the U.S. and the West . So, we formed a United Nations Assesament
Project at The Heritage Foundation..

We now have two analysts', one research associate and a senior
fellow, former.U.S. Alternate Reprresentative to the U.N. for
Political Aff airs, Charles Lichenstein. (Your own former
Ambassador to UNESCO, Owen Harries, joined Heritage as a
Distinguished Fellow from September 1983 to December 1984 to work
on our U.N. Assessment Project.)

Because of the number of complaints about UNESCO in our initial
meetings with U.N. experts, UNESCO was considered a high priority'
project. Upon examination, we found UNESCO to be a wasteful,
bloated bureaucracy which spent more on administration than an
education, science and culture. It was biased against. the U.S.,
the West, free

enterprise, ruled by a Third World majority, and dominated by
the Soviet Union and radical socialist states.

We published six Backgrounders from October 1982 to December
1983 documenting our observations with examples, numbers, names,
UNESCO official resolutions a nd excerpts from their publications.
Widespread press attention, luncheons, seminars, and workshops were
organized to complement our publications. We involved the key
participants of the policymaking process: Members of Congress,
their staffs, Administrat i on officials, press and representatives
of organizations interested in the United Nations. Then, lo and
behold, the mounting data began to change public opinion. In fact,
because of UNESCO's earlier attempts to impose a system of
international quasi-censo rship, the U.S. press was unusually
critical of this particular U.N. agency. With a change in public
opinion, we began to see a whole new series of policy options open
up.

In December of 1983 the United States Government officially
served notice that it would pull out of UNESCO, and the U.S.
General Accounting Office sent an audit team to Paris to find out
just what UNESCO had been spending its money on.

The GAO found that UNESCO was grossly mismanaged. It had
enormous power vested in one man, Director Gen eral Amadou M'Bow.
Its: governing bodies did not@ govern. There were no effective
evaluating and coordinating systems. The programs had no clearly
defined objectives and no target dates for completion. Hiring
practices circumvented the organization's own r egulations and
undermined the professional integrity of the staffi There was
little accountability for the money disbursed. There was an
increasing concentration of staff at headquarters in Paris.
Payments were being made in contravention of the organizat i on's
rules, and the recommendations of external auditors were repeatedly
ignored. So, on December 31, 1984 the United States withdrew from
UNESCO. Since that time, the United Kingdom and Singapore have
served notice of their intention to withdraw, nine co untries have
demanded reform including Japaii,*Germany and Canada, and the U.S.
has set up a UNESCO Reform Observation Panel to monitor the reform
process.

The central role of The Heritage Foundation in all of this was
well understood by UNESCO officials. They refused cooperation,
information and even publicatiors requests were delayed. We were
openly denounced by U.N. officials in discussion with diplomats at
the United Nations. And, your current Ambassador to UNESCO, Gough
Whitlam, has acknowledged our role in a recent speech before the
United Nations Association of Great Britain and Northern Ireland.
He said:

The Heritage Foundation is a very influential., and to my mind,
a very sinister, organization.

9

With'our UNESCO project Heritage was able to help change the way
the U.S. looked at the U.N. Of course, it did help that we had a
sympathetic Ambassador and President who were willing to change.
Ambassad or Kirkpatrick once described this change as finaliy
taking off our "KICK ME" sign. while that might seem like a
humorous remark for an Ambassador to make, I can assure you it
signified a very significant change in the way the U.S. reacted in
the U.N.

Ano ther issue that we have been very interested in recently is
the Strategic Defense Initiative. A little more than three years
ago it became evident to those of us at Heritage that our present
strategic nuclear doctrine of Mutually Assured Destruction was j
ust as its acronym claimed, "MAD." This strategy leaves us with the
meager defense of threatened retaliation and has led us into an
arms race with the Soviet Union.

At that time, we helped launch a project named High Frontier,
headed up by General Daniel G raham, which laid the groundwork for
future research on strategic defense within the government. In
April 1982 the High Frontier group within Heritage released a study
which concluded that the United States could, within a decade,
deploy a defense capable of filtering out 95 to 98 percent of a
Soviet first strike at a cost of less than $20 billion. Since that
time independent studies by the Pentagon, Boeing Corporation, and
United Technologies have reached similar conclusions. And, in March
of 1983 Preside nt Reagan proposed a major research program for
space- and land-based ballistic missile defense systems.

Project High Frontier has become a separate public policy group
which concentrates on supporting the Strategic Defense Initiative
in the public debates . And since Heritage began work on strategic
defense in 1982, we have released more than a dozen background
studies, a monograph, two jburnal articles, and several "Op-Eds"
which focus on various aspects of this exciting high tech
defense.

We have found t hat with innovative alternatives like
privatization and the Strategic Defense Initiative we are no longer
reacting to an agenda set by the traditional "power
elite"--Congress, the media and the Washington lobbyists. With
innovative alternatives we can set the agenda. We can cause
change.

In the case of our,work on UNESCO, we have brought to light the
abuses in a program which was previously thought sacrosanct. We
have helped the change the focus of the debate. We are no longer
discussing how much more we " rich" nations owe the "poor" nations,
but questioning how effective are the programs we have provided to
these nations? Are they, in fact, promoting education, science
and.culture in the case of UNESCO? And if not, what are the
alternatives?

We have learned how to activate the ideas and policies necessary
to move a society toward-greater individual freedom. In short, we
have'learned how to cause change. We conservatives may have to work
a

1 0

little harder to maneuver our ideas onto the policy agenda pre
cisely becaus;a we are advocating change: a change in the power
struct'are--away from the central government back to the
people--way from the "power elites" back to the people. -And this
is not easy.

As Philip Ayres pointed out in a recent Ouadrant,article:

One of the more interesting ironies of our day is that t1i8se
who have traditionally most professed to represent 'the people' are
now, in'the affluent Western democracies most distrustful of the
people and, fortified with a large New Class element, most aloof
from them, too.

I believe this move is understandable because the people have
become distrustful of the power elites and the New Class. The
people are tired of being "represented." They have found that they
can make their own choices, and they have called for more
responsibility and greater freedom. They have called for change. As
conservatives we must continue to be innovative. We must build on
our ideas, popularize them, and make them available to the people,
for them to choose.

Rep. Peter Roskam (R-IL) says it's "a great way to start the day for any conservative who wants to get America back on track."

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